Friday, May 11, 2018

Chris Dillow — Job Guarantee: Marxist or Keynesian?

What we have there, then, are two different conceptions of a JG. On the one hand, it might be a policy which helps capitalism function better (Keynes). But on the other, it might be a form of transitional demand – a policy which whilst fulfilling human needs is one that cannot actually be sustainably adopted by capitalism and is instead a stepping stone towards socialism (Marx).
I’m honestly not sure which it is.
I would not put it in terms of capitalism and socialism but rather forms of capitalism and socialism and their interaction.

A JG is incompatible with capitalism as private control of the means of production, that is, both classical liberalism as laissez-faire and neoliberalism as government policy favoring capital (and rent-seeking), unless the JG is transformed into workfare (as CD observes).

On the other hand, a JG is compatible with social democracy as a modification of capitalism (Keynes), democratic socialism as as form of combined public and private control that eliminates economic rents, and socialism as public control of the means of production. A JG is irrelevant in the case of pure communism, where all able to worker contribute their work and its output to the society and are compensated according to needs.

Capitalism should not be confused with markets. Markets are compatible with socialism that is not purely communistic, where "from each according to one's abilities and to each according to one's needs" is the foundational socio-economic principle (Marx and Engels).

The trend was from classical liberalism, to social democracy, to neoliberalism. The next stage in the dialectic is to be determined. China is proposing socialism with Chinese characteristics and recommending socialism with the local characteristics to the rest of the world in a new multipolar world order that replaces current Western liberal hegemony.

There are essentially five major forms of political organization on the table, excepting traditionalism, which I discuss separately. Starting from the right side of the political spectrum and moving left:

This is not a linear progression, since fascism and communism meet in state control under the supposedly temporary dictatorship of the proletariat that never progressed beyond dictatorship.

While Traditionalism is generally not considered as a major influence on political theory now, it is coming to the fore again:

  • Islamic law and its concept of social justice is spreading 
  • Catholic social teaching is being revived by Pope Francis
  • Traditional Russian Byzantine (Orthodox) culture is being promoted under Vladimir Putin
  • Traditional Chinese culture, especially Confucianism, is being rehabilitated after Mao by Xi Jinping
  • PROUT or Progressive Utilization Theory is based on Indian Vedic tradition. 

So making the choice between Keynes and Marx may be somewhat simplistic and fall into the logical fallacy of the false dilemma, arguing in terms of black or white when there are many shades of grey.

In my view, the MMT JG is step away from neoliberalism in the direction of social democracy and a mixed economy. But it has further implications if implemented with other aspects of MMT socio-economic policy based on SFC modeling and functional finance, where makes room for a much more active use of fiscal space while providing a rationale for understanding the potential of it. So while a JG is "Keynesian," there is more to than that, as Chris Dillow senses. But it is not necessarily "Marxist" either.

Stumbling and Mumbling
Job Guarantee: Marxist or Keynesian?
Chris Dillow | Investors Chronicle


Konrad said...

The only Americans who have ever had a jobs guarantee were plantation slaves and prison inmates.

Other than that, I favor a federal jobs program like the 1930s New Deal, but I say that when we start talking about job “guarantees,” we start talking about unworkable fantasies.

I say that JG advocates are cultists because they cling to the utopian word “guarantee.”

Why the fanatical fixation on “guarantee”? Why not simply call for another New Deal? Why not simply call for public works programs? Why not simply call for nationwide infrastructure projects? (I don’t mean “public-private partnerships,” which always end up being 100% privately owned.) Why not simply call for more jobs?

Regrettably, it will make little difference if we have more jobs, since American society is now structured so that all moneys flow to the top. With neoliberalism, more jobs will mean more rent money and more debt payment money flowing to the top. This robbery will continue to destroy the USA, with or without a JG. If we fail to stop it, then nothing else will matter.

Andrew Anderson said...

The Soviet Union had guaranteed jobs, iirc, and the saying there was:

We pretend to work and they pretend to pay us.

Do we really want to repeat that experience?

Yes, let's have generous infrastructure spending but using bulldozers to maximize the efficient use of manpower - not shovels to minimize the efficient use of manpower.

Beyond that, a Citizen's Dividend, a supplement to income, can be metered out to all citizens equally to supply what still may be lacking in aggregate demand.

Andrew Anderson said...

And yes, rentiers may attempt to hoover up all the Citizen's Dividend but the government-privileged usury cartel CANNOT raise the rent (interest) on existing loans.